News: Some sellers look to profit from enhanced housing grant

Several property agents, however, believe that such opportunistic moves will not work.

With the introduction of higher income ceiling and higher grants expected to boost the HDB resale market, some sellers wasted no time to raise their asking price in the hopes of gaining more profits.

In fact, a couple who are trying to sell their HDB flat in Hougang has asked their property agent, ERA Realty senior marketing director Davon Chai, to increase their asking price to $550,000 – way higher compared to $480,000 last transacted price of a similar unit nearby, reported Today Online.

“When some sellers look at these new grants, they get very optimistic and excited and end up raising prices based on HDB’s ballpark figure of the grants that buyers can get,” said Chai.

“It actually makes it difficult for us agents. With these new grants, it will take some effort for us to close the gap between the buyers’ expectations (of more affordable homes) and the sellers’ wish to profit (from the grants).”

Several property agents, however, believe that such opportunistic moves will not work. They noted that while the announcement spiked interest in the resale market, this is not likely to last.

“The knee-jerk reaction is that it will indeed ignite more buying interest for resale flats from around this weekend or for September itself,” said property analyst Ong Kah Seng.

Thereafter, most sellers will likely take a wait-and-see stance in the next few months as they “digest” the grants’ impact.

And even if many buyers actually bought units despite the jacked up prices by opportunistic sellers, it will still take at least a month before these transaction will be reflected in the official valuation, said ERA senior marketing director Bhavina Kaur.

This is important since some buyers refuse to buy a flat that is overvalued by $5,000 as “people simply refuse to top up in cash”, she added.

According to HDB rules on resale units, buyers who wish to pay above the valuation has to pay the difference in cash and not from their CPF.

In concurring, ERA key executive officer Eugene Lim said the days of paying high cash-over-valuation amounts for HDB resale units are over.

“Sellers need to price realistically according to what the market will pay, if not they will help their more realistic neighbour sell the flats,” he said.